The cryptocurrency market on December 10, 2018, painted a grim picture for digital asset investors. Bitcoin, the flagship cryptocurrency, continued its relentless descent, trading around $3,478 — a far cry from the nearly $20,000 all-time high it had reached just one year earlier. The broader crypto economy had shrunk to approximately $109 billion, a staggering collapse from the euphoric heights of late 2017.
Over the weekend preceding December 10, bitcoin had briefly offered investors a glimmer of hope, rallying as much as 10% and briefly touching $3,600 on Sunday. But the optimism was short-lived. By Monday, the price had drifted back below $3,500, down approximately 3% to 4.5% over the preceding 24 hours alone. The seven-day picture was even bleaker, with BTC recording losses of roughly 10%.
TL;DR
- Bitcoin traded at approximately $3,478 on December 10, 2018, down ~84% from its December 2017 all-time high
- The total cryptocurrency market cap had shrunk to roughly $109 billion
- A weekend rally of 10% fizzled out, with BTC falling back below $3,500
- The Bitcoin Cash “hash war” between BCH and BSV was a major catalyst for the ongoing sell-off
- Short positions on Bitfinex hit all-time highs on December 6, reflecting extreme bearish sentiment
The Bitcoin Cash Civil War and Its Fallout
One of the primary drivers of the extended crypto market downturn was the bitter Bitcoin Cash “hash war” that erupted in November 2018. When Bitcoin Cash underwent its contentious hard fork, it split into two competing chains — Bitcoin Cash (BCH) and Bitcoin Satoshi’s Vision (BSV). The conflict was far more than a technical disagreement; it was a public battle that saw enormous amounts of computational power and capital deployed in what amounted to an internecine war within the crypto community.
The consequences were devastating for market confidence. As the hash war dragged on, miners redirected hash rate away from the Bitcoin network to support their preferred BCH chain, temporarily weakening Bitcoin’s security. More importantly, the spectacle undermined the narrative that cryptocurrencies were maturing into a stable asset class. If the community’s most prominent projects were engaged in open warfare, how could institutional investors take the space seriously?
By December 10, Bitcoin Cash was trading at approximately $106 per coin, down 33% for the week alone. The fork had decimated BCH’s trading volume, which previously had been around $500 million per day but had dwindled to just $86 million — a fraction of its former self.
Ethereum, XRP, and the Altcoin Carnage
The sell-off was not confined to Bitcoin. Ethereum (ETH) was trading at approximately $91, having lost 6.2% in just 24 hours. From its January 2018 peak near $1,400, ETH had shed approximately 93% of its value — a decline that devastated the ICO-funded project ecosystem that had been built on the Ethereum blockchain.
Ripple’s XRP, which had remarkably overtaken Ethereum for the second-largest market capitalization position, was trading at $0.30 per token with a market cap of roughly $12.4 billion. Stellar (XLM) held the fourth position at $0.11 per coin.
The altcoin market was a bloodbath. More than 2,000 cryptocurrencies existed by this point, the vast majority of which were trading at fractions of their all-time highs. The ICO boom that had fueled the creation of thousands of tokens in 2017 had turned into a spectacular bust, leaving investors with near-worthless holdings.
The Flight to Stablecoins
Perhaps the most telling signal of the market’s state was the dramatic surge in stablecoin demand. Tether (USDT) had risen to become the fifth-largest cryptocurrency by market capitalization, as traders sought refuge from the volatility by parking their funds in dollar-pegged tokens. Even as Tether’s own usage reached a three-month low in terms of volume, competing stablecoins like TrueUSD (TUSD), USD Coin (USDC), and Gemini Dollar (GUSD) saw significant increases in trading volume.
This flight to stability underscored a fundamental shift in market psychology. The speculative fervor that had defined 2017 had given way to capital preservation. Traders were no longer looking for the next moonshot — they were simply trying to avoid further losses.
Short Sellers Dominate as Bottom Remains Elusive
The bearish momentum was reinforced by a massive short-selling campaign. BTC/USD short positions on the Bitfinex exchange had reached all-time highs on December 6, just days before the December 10 trading session. The sheer volume of shorts reflected a market that had largely given up on a near-term recovery.
Throughout 2018, traders had repeatedly attempted to call “the bottom” — only to watch prices continue their descent. The year had featured numerous bull traps and dead cat bounces that had lured optimistic buyers back in, only to punish them with further declines. By December, most traders were too skeptical to make any definitive calls about where the bottom might be.
Adding to the negative sentiment, reports that Goldman Sachs had shelved plans for a cryptocurrency trading desk — first reported in September — continued to weigh on institutional interest. The narrative that Wall Street was embracing crypto had been a major pillar of the 2017 bull run, and its collapse removed a key source of bullish conviction.
Why This Matters
December 10, 2018, stands as one of the darkest days in cryptocurrency market history. Bitcoin’s 84% decline from its all-time high had wiped out hundreds of billions of dollars in wealth, and there was no clear sign that the bleeding would stop. The Bitcoin Cash hash war had exposed deep fractures within the crypto community, while the failure of the ICO model had left the Ethereum ecosystem reeling.
Yet for those with a longer-term perspective, this period of maximum despair would eventually prove to be the foundation of the next great crypto bull run. The infrastructure being built during the bear market — from stablecoins to decentralized finance protocols — would lay the groundwork for the explosive growth that followed in 2020 and 2021.
Disclaimer: This article is for informational and historical purposes only and does not constitute financial advice. Cryptocurrency investments carry significant risk, and past performance is not indicative of future results. Always conduct your own research before making investment decisions.
the bch vs bsv hash war caused so much collateral damage. two chains fighting over hashpower while btc bled 84%
the bch vs bsv hash war was the dumbest fight in crypto history. two chains burning millions on hashpower while btc bled 84%. everyone lost
hashwar_casualty the BCH vs BSV fight wasted millions in electricity while BTC was in freefall. calvin ayre and roger ver literally burned money on ego
the hash war burned how many millions in electricity while BTC was dumping 84 percent. roger ver really thought he was saving crypto by burning it down
weekend rally of 10% then right back below 3500. classic dead cat in a brutal bear market
109 billion total market cap. from 800B to 109B in a year. imagine entering crypto in december 2017
109B total market cap for all of crypto. dropped from 800B. the people who bought in this range and held for 2 years made generational wealth
Wei Zhang buying at 109B total market cap and holding 2 years was the trade of a generation. most people who entered in december 2017 sold at massive losses by march
10% weekend rally then straight back below 3500. classic dead cat in the worst bear market crypto had seen. so many people called the bottom at 6k
people called 6k the floor, then 5k, then 4k. every support was a trap until 3200 finally held. the bottom callers got destroyed on the way down
my first crypto winter. bought at 6200 thinking it was the floor. watched it melt to 3200 and couldnt look at blockfolio for months
Kai N. every support level was a trap until 3200. the people calling 6k the bottom in november 2018 got absolutely wrecked
marcelp_ buying at 6200 thinking the floor, classic. i bought at 3200 thinking the ceiling. we were both wrong about something
dropping below 3500 during the hash war was the moment even the strongest hands were shaking. BCH SV vs ABC literally burning money while BTC bled out
beartrap_99 the hash war was the most expensive ego trip in crypto history. wright and ver spending millions on mining just to prove a point while the whole market collapsed
3500 felt like the end. turned out to be the generational bottom. funny how that works
the BCH hash war was the most destructive ego battle in crypto history. both chains lost 90% of value while miners burned millions fighting over a fork nobody wanted
BTC at $3478 felt like the end. came within $200 of my liquidation price on a margin long from $4200. darkest month of my crypto life
klang_skeptic_ holding through that took real nerve. most people I knew just sold and never came back. the ones who held through $3K are the ones buying Lambos in 2021
the hash war burned through something like 400k BCH between both sides. roger ver and calvin ayre fighting over a chain while the entire market collapsed around them. priorities
400k BCH burned on hash wars while the entire market was on life support. crypto priorities were completely unhinged in 2018
remember checking coinmarketcap every morning hoping the bleeding stopped. 109B total cap felt like the end of the world at the time
BCH hash war literally killed the last bit of confidence retail had left in dec 2018. wright and ver burning millions on mining while btc bled to 3478
Marek D. calvin ayre reportedly dropped 30m on the SV side alone. all that hash power wasted on ego while the entire market cap shrank to 109b
winter_soldier_ calvin ayre dropping 30m on SV hash power while the entire market bled to 109B. ego burning electricity while retail lost everything
10 percent weekend rally to 3600 then straight back down. classic dead cat bounce during a real winter
bought at 6200 thinking it was the floor. then 3478 happened. held for 3 years and finally broke even. that is the crypto experience in one trade